Crosby v. National Foreign Trade Council
Whether a Massachusetts law restricting state purchases from companies doing business with Burma (Myanmar) was preempted by a subsequent federal law imposing sanctions on Burma, thereby rendering the state law unconstitutional under the Supremacy Clause.
The Decision
9-0 decision · Opinion by David Souter · 2000
Majority Opinion— David Souterconcurring ↓
The Supreme Court ruled unanimously, 9–0, that the Massachusetts Burma Law was preempted by the federal sanctions legislation and was therefore invalid under the Supremacy Clause. Justice David Souter wrote the opinion for the Court, which resolved the case solely on preemption grounds without reaching the broader constitutional questions about the Foreign Commerce Clause or the federal foreign affairs power.
The Court identified three independently sufficient reasons why the state law created an impermissible obstacle to the federal statute's objectives. First, the federal law delegated broad discretion to the President to control the scope of economic sanctions against Burma — including the power to expand, reduce, or waive them — and the Massachusetts law directly undermined that discretion by imposing its own additional, inflexible penalties that the President could not lift. Second, Congress had deliberately limited the mandatory scope of federal sanctions to a ban on new investment in Burma, while the Massachusetts law cast a far wider net by penalizing companies with virtually any business relationship with Burma. By going further than Congress intended, the state law conflicted with the carefully calibrated federal approach. Third, the federal law directed the President to develop a comprehensive multilateral strategy to improve conditions in Burma, and the Massachusetts law interfered with that diplomatic mission — a point illustrated by the fact that U.S. trading partners, including the European Union and Japan, had formally protested the state law and even initiated proceedings against the United States before the World Trade Organization.
The Court emphasized that the absence of an express preemption clause in the federal law was not dispositive. Justice Souter wrote that Congress's silence on preemption could simply reflect its confidence in the well-established doctrine of implied preemption, particularly in areas of uniquely federal concern like foreign affairs. The Court applied the standard obstacle preemption analysis: when a state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," it must yield.
By resolving the case on these relatively narrow preemption grounds, the Court avoided making broader pronouncements about the limits of state power in foreign affairs. The practical effect was clear, however: states could not use their purchasing power to pursue independent foreign policy agendas that conflicted with federal sanctions legislation.
Concurring Opinions
Justice Scalia filed a concurring opinion, joined by Justice Thomas, agreeing with the result but objecting to portions of the majority's reasoning. Scalia argued that the Court should have relied strictly on the conflict between the text of the state and federal statutes, rather than looking to broader legislative history and the purposes behind the federal act, which he viewed as an unreliable guide to congressional intent.
Background & Facts
In June 1996, the Massachusetts legislature passed the "Burma Law," which barred state agencies from purchasing goods or services from any company doing business with Burma (now Myanmar). The law was a response to widespread human rights abuses committed by Burma's ruling military junta, the State Law and Order Restoration Council (SLORC). Under the Massachusetts statute, companies on a "restricted purchase list" — those with investments, employees, or other ties to Burma — were effectively blacklisted from state contracts, with only narrow exceptions. The law reflected a growing movement among state and local governments to use their purchasing power as a tool of foreign policy protest.
In 1997, Congress stepped into the picture by passing its own federal sanctions against Burma as part of the Foreign Operations, Export Financing, and Related Programs Appropriations Act. The federal law imposed a ban on new investment in Burma by U.S. persons, authorized the President to prohibit additional transactions if the Burmese government committed further large-scale repression, and directed the President to develop a comprehensive multilateral strategy toward Burma. Importantly, the federal law gave the President significant discretion to calibrate the scope and intensity of sanctions and to waive them under certain conditions.
The National Foreign Trade Council, a nonprofit organization representing hundreds of companies engaged in international commerce, filed a lawsuit in the U.S. District Court for the District of Massachusetts. The Council argued that the state law was unconstitutional because it conflicted with federal authority over foreign affairs and international trade. The district court agreed and declared the Massachusetts Burma Law invalid on three independent grounds: it was preempted by the federal sanctions law, it violated the Foreign Commerce Clause, and it impermissibly intruded on the federal government's exclusive foreign affairs power.
The U.S. Court of Appeals for the First Circuit affirmed the district court's ruling on all three grounds, agreeing that the Massachusetts law could not stand alongside the federal sanctions regime. Massachusetts then sought review from the U.S. Supreme Court, which agreed to hear the case. The Supreme Court took the case to resolve the important question of when state laws aimed at foreign policy goals must yield to federal legislation in the same arena.
The Arguments
Massachusetts argued that its Burma Law was a legitimate exercise of the state's traditional power to decide how to spend its own money — essentially acting as a market participant rather than a regulator. The state contended that the federal sanctions law did not expressly preempt state action and that Congress had left room for states to add their own economic pressure.
- The state's purchasing decisions are a traditional government function, and the federal law contained no express preemption clause barring states from imposing their own Burma-related restrictions.
- The Massachusetts law and the federal sanctions shared the same goal of pressuring Burma to improve human rights, so the state law complemented rather than conflicted with federal policy.
- Congress's silence on whether states could impose additional restrictions suggested that Congress did not intend to occupy the entire field of Burma-related sanctions.
The National Foreign Trade Council argued that the Massachusetts Burma Law was preempted because it stood as an obstacle to the full accomplishment of Congress's objectives, including the President's ability to speak with one voice in foreign affairs and to calibrate sanctions with diplomatic flexibility.
- The federal law carefully delegated discretion to the President to escalate, reduce, or waive sanctions as diplomatic circumstances required, and the Massachusetts law undercut that flexibility by imposing its own rigid, broader restrictions.
- The federal law limited mandatory sanctions to a specific scope — banning new investment — while the Massachusetts law went much further by penalizing companies with any business ties to Burma, thereby exceeding the pressure Congress had deliberately calibrated.
- The state law had already complicated the President's diplomatic efforts, provoking formal protests from the European Union, Japan, and other allies, and undermining the federal government's ability to pursue a multilateral strategy as Congress intended.